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Crowdfunding

We're looking at the potential of crowdfunding to help bring innovative ideas to life, and sharing advice on how innovators can make the most of this emerging method of finance.Show more

Why are we doing this?

Growth in internet use has made it easier for large numbers of people to access money from many small contributions instead of few large ones.

Banks and other large funders are struggling to meet society's funding needs in the wake of the recession. From the arts sector, to scientific research to funding innovative businesses, alternative methods of providing finance are needed.

What are we doing?

The 'Crowding In', 'Venture Crowd' and 'Banking on Each Other' reports looked at the breadth of areas crowdfunding is having an impact on as well as examining the challenges and opportunities for some specific applications of the model. Through the Innovation in Giving Fund Nesta has supported three crowdfunding intermediaries that are applying the model to increase levels of charitable giving.

We are also producing practical information for those looking to engage with the model including a tips guide for those raising finance and a directory of sites to inform people which site best suits their funding needs.

Nesta estimates that although only £200 million of funding went through crowdfunding in 2012 it has the potential to grow significantly in the future. Should this model address the challenges it faces as it grows, up to £15 billion of finance annually could be delivered through the model in the coming years.

Crowdfunding tips

My crowdfunding journey started when I was helping to oversee the production of our report on crowdfunding in the Autumn of 2012 'Crowding in: How the UK’s businesses, charities, government and financial system can make the most of crowdfunding'. This blog follows what happened after I paid up in November 2012 and eagerly waited to see if the project I had backed got enough funding to go ahead.

Three years ago Nesta published research which aimed to profile and explore crowdfunding platforms. We also began to fund and support a group of crowdfunding platforms to grow their services. This took place at a time when the market for crowdfunding was just beginning to develop in the UK. Now, as we are preparing to run the largest ever crowdfunding study with Cambridge University, it seems like a great time to go back and take a look at how these pioneering platforms have grown and developed over the time….when crowdfunding went mainstream.

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Nesta is a registered charity in England and Wales 1144091 and Scotland SC042833. Our main address is 1 Plough Place, London, EC4A 1DE. You can reach us by phone on 020 7438 2500 or drop us a line at [email protected].